Web 1.0 travel site StudentUniverse buys its way into mobile with WeHostels deal

If you only read tech blogs, you probably haven't heard of StudentUniverse. That's because the Boston-based company launched long before tech blogs existed, in 1999, and has stayed fairly quiet since.

The company, which provides travel services for students, not only survived the dot-com crash and adapted to Web 2.0, it has thrived. StudentUniverse quietly raised $20 million in venture funding from private family offices, partnered with 65 airlines, grown to 110 employees with offices in the UK, Portugal and the Philippines, and served eight million students this year.

Today the company acquired its way further into mobile, buying New York-based app maker WeHostels for an undisclosed amount. ("I can tell you that our investors walked away happy," CEO Diego Saez-Gil says.)

Previously known as InBed.me, the company had raised $1.2 million in seed backing in March 2012 from Parisian venture firm Ventech, Quotidian Ventures based in New York, Brazilian firm CAP Ventures, and TA Ventures.

WeHostels' iOS and Android apps offer social media-enabled hostel booking for backpackers, available in seven languages and in 800 cities. The company had 200,000 monthly active users, boasting 80,000 hostels and hotels available for booking. WeHostels won PhoCusWright's "Most Innovative Travel Startup of the Year" award last year. In 2013, gthe company experienced 800 percent year-over-year growth in bookings.

The WeHostels apps will survive as a stand-alone brand, and the company's eight New York-based employees will all join StudentUniverse. Saez-Gil will grow his mobile team in New York to work on WeHostels and develop mobile products for StudentUniverse.

Saez-Gil said the deal was a good match because StudentUniverse's infrastructure will introduce WeHostels to millions of students around the world. Likewise, WeHostels can contribute its mobile expertise to StudentUniverse, he said.

The company had made inroads against the hostel-booking behemoth, Hostelworld, by introducing social media to the booking process. Backpackers can choose their hostels based on Facebook profiles of others staying there. As I wrote when WeHostels first raised venture funds, the social nature of traveling is amplified 1000-fold in the culture of backpacking:

You’re sharing a living space, a bathroom, even a bunk with these people. It makes sense that you’d like to get a sense of the type of people a certain hostel attracts, if not connect with those people directly, beforehand.

WeHostels is based in New York with roots in Argentina, where Saez-Gil hails from, and Chile, where the company participated in Start-Up Chile, a government program which provides $40,000 to startups. Several of the company's developers are based out of Colombia. And now it's parent company is based in Boston.